Scientific American Supplement, No. 1178, June 25, 1898Various
History
Scientific American Supplement, No. 1178, June 25, 1898
Various
Science -- Periodicals
This same rule, although to a less extent, applies to the operating
and general expense cost, that is, the cost other than interest. To
particularize, the manager's salary and other administrative expenses
do not increase in proportion to maximum output of station; therefore,
the cost of administration per unit of output, if the business is in a
healthy condition, must be from year to year reduced. There are a
great many other expenses that are not directly in proportion to
output, and these follow the same rule. In a well-run plant the
percentage of operating expenses to gross receipts will stand even
year after year, while the income per unit of output will be
constantly reduced. This is an excellent evidence of the fact that the
cost per unit of output is constantly being reduced, as, if it were
not, the percentage of expenses to gross receipts would be increased
in direct proportion to the reduction in price. Moreover, it should be
borne in mind that there are many difficulties in the way of universal
use of electric energy from a central station system. It is the rare
exception to find a house not piped for gas and water. In the case of
the latter it is almost invariably the rule that owners are compelled
to pipe for water, under the sanitary code of the municipality. On the
other hand, in a large residential district, it is the exception to
find a house wired for electric light; consequently the output of
current per foot of conductor is at the present time very low as
compared with the output of gas per foot of gas pipe in any of the
large cities. The expense of wiring (which must of necessity be borne
by the householder) is large, and it is often a barrier to the
adoption of electric illumination, but as the rule to wire houses
becomes more general, the output per foot of main will constantly
increase, and therefore the interest per unit of output per foot of
main will constantly decrease. This same rule will apply in the case
of expenses of taking care of and repairing the distribution system,
although to not so great an extent.
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